Rooftop Solar Leases Causing Problems For Some Home-Sellers

Rooftop solar system leases are complicating the selling process for some homeowners in the US, thanks to potentials buyers’ lack of familiarity with the leases and reluctance to take them on, according to a new report from Bloomberg.

Might seem a bit contradictory to those of us who write and who read about solar on a daily basis, but apparently the inclusion of an already installed solar system with obligations is a deterrent for some, not an incentive.

Triple Array done by Home Energy Systems (HES) Solar

The main factor seems to be that the solar leasing model is entirely alien to many homebuyers, leaving many unwilling to accept it. The situation is apparently even forcing some home-sellers to lower asking prices in order to unload properties with the leases systems. Interestingly, this is the opposite case as with fully purchases solar panel systems, which have been shown to increase home prices even more than the solar panels cost.

There are some other factors playing in as well. In some cases, for example, despite already being approved for a mortgage, potential buyers haven’t had high enough credit scores to assume the solar lease! These cases are apparently relatively rare though, according to SunPower’s vice president Martin DeBono.

“Homeowners don’t understand what they’re signing when they get into this,” stated Sandy Adomatis, a home appraiser in Punta Gorda, Florida, who created the industry’s standard tool for valuing the systems. “You’ve got another layer to add on top of finding a buyer for the house. It’s not a plus.”

As a counterpoint to that perspective, SolarCity spokesman Jonathan Bass, stated: “They’re essentially moving into a home with a lower cost of ownership, a lower cost of energy. It becomes a selling point instead of a point of misunderstanding.”

However, that assumes that the bulk of the savings didn’t occur at the beginning of the leasing period.

Solar leases were introduced in 2008 and started to take off in about 2012. As much as as 70 percent of the residential systems being installed now are financed through leases, according to GTM Research. Most of the systems in place remain in the hands of the original customer, suggesting the difficulties in selling these properties are just beginning.

“Some buyers just won’t be on board” with assuming a solar lease, said Nick Culver, a solar analyst at Bloomberg New Energy Finance in New York. “Even if you save money every month, you limit yourself to a certain subset of buyers.”

Hmm. Here’s to hoping that this is just the result of lack of awareness, and will resolve itself in the coming years as solar becomes more common.

According to the report, this year (2014) will be the peak year for solar leasing/PPAs in terms of residential solar market share. Thereafter, solar system ownership is expected to rise steadily every year.

About the Author

James Ayre 's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.